In: Accounting
The Flapjack Corporation had 7,648 actual direct labor hours at an actual rate of $12.18 per hour. Original production had been budgeted for 1,100 units, but only 956 units were actually produced. Labor standards were 7.3 hours per completed unit at a standard rate of $12.75 per hour.
Round your answer to the nearest cent.
The labor time variance is
$4,359.36 unfavorable
$4,359.36 favorable
$8,532.30 unfavorable
$8,532.30 favorable
LABOR TIME VARIANCE = (Standard labor hour- Actual labor hours)* Standard labor hour rate
Standard labor hour = Actual output * Standard time per output
= 956 units * 7.30 hours
= 6978.80 hours
Actual labor hours = 7648 hours
Standard labor hour rate = $ 12.75 per hour
LABOR TIME VARIANCE = (6978.80 hours - 7648 hours)* $ 12.75 per hour
= $ 8,532.30 Unfavorable
Correct answer is Option C : $ 8,532.30 Unfavorable